How non-bank lenders assess development deals

Non-bank lenders operate differently from traditional banks. They move faster, structure creatively, and assess risk through operational lens rather than pure credit metrics. Understanding how they think changes how you present a deal.

The first thing a non-bank lender examines is the operator. Not the balance sheet alone, but the track record. Have you delivered similar projects? Do you understand your market? Can you execute under pressure? A strong operator with a weaker asset often gets funded before a weak operator with a strong asset.

The second filter is the asset itself. Location, condition, market demand, exit strategy. Non-banks want clarity on why the deal works and what happens if timing shifts. They ask harder questions about downside scenarios because they hold the risk longer than traditional banks.

Loan structure matters more than you might think. Senior debt at 65% LVR is straightforward. Stretch senior at 75% requires stronger operators and clearer exits. Mezzanine sits between senior and equity, bridging gaps in the capital stack. Each tier carries different risk and return expectations. Non-banks price accordingly.

Due diligence is thorough but fast. A non-bank lender can assess a $5M development deal in two weeks if the information is complete and honest. They want to see your construction timeline, your pre-sales or leasing assumptions, your contingency plans. They want evidence, not optimism.

Transparency accelerates everything. If you hide problems, they find them and the deal stalls. If you surface issues upfront and explain how you'll manage them, they move forward. Non-banks have seen most scenarios. They respect candor.

Exit strategy is non-negotiable. How do you repay the loan? Refinance? Sell? Lease-up and hold? The clearer your exit, the faster the approval. Vague exits signal uncertainty, and uncertainty kills deals.

Co-investment alignment matters. If the lender has skin in the game alongside you, they assess risk more carefully and support you more actively. This is why Siare co-invests in every deal. It removes conflict and builds trust.

Timing is structural, not emotional. Non-banks understand that construction takes time, markets move, and conditions change. They build contingency into terms. But they also expect you to manage timeline risk actively. Delays cost money. Demonstrate you've planned for them.

The capital stack itself tells a story. If senior debt is 65%, mezzanine 15%, and equity 20%, the deal is balanced. If senior is 80% and equity is 5%, the deal is overleveraged and risky. Non-banks read the stack as a signal of confidence and risk distribution.

Relationship matters in non-bank lending more than in traditional banking. You're not a transaction. You're a partner in a specific deal. If you deliver on this one, they want to fund your next five. This is why repeat operators get better terms.

Market conditions shift. A deal that works in a rising market may struggle in a flat one. Non-banks price for this. They ask what happens if construction costs rise 10%, or if leasing takes six months longer. They want to see you've thought through scenarios.

Final point: non-bank lenders want to say yes. They're not gatekeepers. They're capital providers looking for good deals with capable operators. If you present clearly, answer questions directly, and show you've done your homework, they'll move fast. The deal either works or it doesn't. Either way, you'll know quickly.